Low conversion efficiency of the traditional thermodynamic cycles has been one factor that has hampered practical application of concentrated solar power. The highest conversion efficiency to date is reported to be 31.3% for a Stirling engine coupled to a 64 m2 (active area) dish on a freezing but very bright day in Albuquerque in January 2008. This was not a particularly large improvement on the previous record of 29.4% set 25 years earlier, suggesting that practical upper limits are being approached. Efficiencies of power tower, parabolic trough and linear Fresnel reflector approaches, generally based on the Rankine thermodynamic cycle, are appreciably lower with peak efficiency of 25%, 20% and 16% respectively the best expected in the near to medium term.
Quantum based thermodynamic cycles offer higher efficiency. In particular, it has been shown that the conversion efficiency for monochromatic light in a photovoltaic converter monotonically approaches 100% as the bandwidth and angular spread of incident light decreases and the intensity increases. The angular spread of sunlight from the sun's disc and the finite intensity of sunlight places a thermodynamic limit of 87% on sunlight conversion based on this strategy of dividing sunlight into monochromatic components. The recent spectacular rise in efficiency of monolithic tandem stacks of solar cells is testimony to this effect. Efficiency has increased spectacularly from 24% in 1990 to the most recent record of 41.6% efficiency established by Boeing/Spectrolab.
In recent times interest has increased in spectral splitting as a means to further enhance the efficiency of solar conversion beyond that possible from monolithic cell stacks. An efficiency of 42.7% measured by partitioning the solar spectrum and converting by 5 separate cells was recently reported earlier this year and more recently this figure has been extended to 43%. Complementing these cell results, a system efficiency of 36.5% has been independently confirmed for a small system based on this approach including additional system losses such as optical losses in the required concentrating lens and dichroic reflectors. This is already appreciably higher than the 31.3% result with traditional thermodynamic cycles, despite the obvious untapped potential.